The Paradox System

One other thing - be sure you are not in a trade over the week-end with these meetings. You just might find your trade gone and in the hole when the market opens on Sunday.

Thanks Dove, that's good advice. Activity always weakens on Friday after 12 est, so may very well be not enough time to garner 40 pips before weekend close anyway.
Lost 40 pips from jumping in short to early last night anyway. I really appreciate the sacrifice on your part, giving all the time and effort with us. I now know why I have never given up. Have a Blessed weekend Sir!

Andy.

You too - and everyone else have a great and very blessed week-end.

Best wishes and lots of studying everyone.

Yes have a good weekend you too. And yes im going to re read all dana posts

Have a Good and Happy Weekend Master. Take Care.

I believe we have a trader on this thread is from the Island Fiji which was devastated with Cyclone Winston. I ask for prayers for those in that area. 40 were killed and over 900 evacuated.

someone calculated turning points using biblical number, and he calculated that after end of february stock market will get worsen or another crash. this is another test for his works. quite interesting.
i want to take long shower after weeks of confusion.
thanks Commander.

You got it. I hope he and his family are ok.

I remember few months ago a Historical Big hurricane "Patricia" was going to hit in my State... and Thanks to God few hours before the Hit the Hurricane start to dissapear very fast and weird... (only was a storm in the coast but in a few parts)

I pray that Island can recover soon.... Good Vibes to them.

The DB/SAR is used on the 2 hour and Daily for long term trading and there are several ways in using these indicators. The Fibo is the basic in using DB/SAR for entries. The Fibo highs and lows (the”0” point) is also your reference for the entries trading long term.

In using these indicators for the 2 hour can run a trade for days into a week. Using the indicators on the Daily can run for weeks.

In trading intraday you are looking at 200 pips a week with 40 a day. But using the DB on the 2 hour can accumulate those 200 pips weekly in one or two trades for the week.

In this type of trading you are setting yourself up for the entry and once the trigger is pulled you are set to let this trade run by closing your workspace and doing other things you enjoy without setting at your computer for 40 a day.

With long term trading your broker (trading a live account) will either take or give the closing/opening price of the 17:00 EST bar exchange rate. All open FX positions held overnight are subject to a debit or credit interest rate revaluation to reflect the position being rolled over to a new Value Date. The operation known as the rollover and applied to spot positions held at 17:00 Eastern Standard Time (New York time) on any given trading day.

The ‘rollover’ is made up of two components, namely the tom/next swap points and financing of unrealized profits or losses. The accumulated combined rollover credit or debit is added or deducted from the previous opening price of the position. This varies from country to country and which pair you are trading.

One thing I do highly recommend is never let your trade run over the week-end. Even though the market is closed does not mean the central banks are not trading over the week-end. This is why you see gaps when the market opens on Sunday’s.

For money management you want to never place pressure on your live account. You want to be sure you always have the margin to trade in any type of trading. The rule is no more than 2.3% of your margin. You need this margin in order to compound your trades; especially long term. This is what the SAR is for; compounding your trades by adding more funds into the trade.

In long term trading you DO NOT use trailing stops. The worst mistake a trader can make is using this type of stop. In long term trading the market is constantly moving up and down in various swings. With a trailing stop you can lose money and not gain. After 60 profits you move your stop to B/E and you leave it at B/E. In the beginning of learning this technique have a TP of 100 pips. And gradually you will know when to take profit.

You have to remember this is not intraday trading but long term. And if you do not have the heart in letting your trade running then this is not for you. Long term trading is from the top of the Fibo to the bottom of the Fibo and vice-versa.

Trading long term with the Daily is the same as with the 2 hour but this runs into weeks of letting your trade running. You must close your trade before closing on Friday’s and reopen your trade on Sunday’s. Taking a look at your Daily you have a high of 132.276 and a low of 122.443 giving you a profit of 983 pips in just over 4 weeks. And that averages about 240 pips a week. This trade was really long term – that doesn’t happen often. There are traders that want to trade the Daily but as for me; the 2 hour long term is all I need.

One thing you always have to be sure of before entering a trade long term; the setup is correct and the 1 and 2 hour are in sync for pulling the trigger. You really have to be patent in trading long term for the proper setup. Like this Friday’s closing; we are at the top but the setup is not correct for long term; which means we could go higher/high because the 1 and 2 hours are out of sync with the 1 hour in the uptrend.

But once the setup is correct then the target is the lower Fibo. You HAVE TO write down the level of this target. If it is less than 100 pips then still – that is the target. Do not get greedy; just follow the rules and you will do fine. And this rule is for both the 2 hour and Daily. So in other words; do not use the 2 hour for entry and the Daily as target. That will not work. You trade one or the other and not both.

Let me tell you a story of a trader’s greed that I had trained and we will call her Debbie:

Debbie was an exceptional trader. In fact, she was one of the best, if not the best, I had ever trained. Her concept of the Paradox was phenomenal and she was a fast learner in all areas of the Paradox. After about 4 months of training she was ready for a live account. And she did open a live account with $10,000 US dollars; which was her life savings. In a 6 month period she built that account to just over $145,000. Her dream was to travel the world from country to country; and she pulled out over half the money for the expenses of traveling around the world.

During her travels she was still trading with a laptop she took with her and enjoying her life of traveling.

One day I get a phone call and it was Debbie. She was crying and very emotional; and raving about losing all her money in her live account. I asked her what happened and she told she forgot to place a stop on her trade the previous night before going to bed. When she woke up she found the trade went against her on a news release and cleaned her out.

My question to her was this: “How much of that money God had blessed you with did you give back to charity?” She was silent for a few moments and said “none”; but was planning on doing so when she returned home.

Back then – a news release was a major issue without a stop and the reason is because those releases can spike and just keep going. And after the call I had check her time table against the releases and it was the NFP. And yes – it did clean out her live account.

She had enough money on her to get her back home and was broke when she did return home. The last I heard from here she had to go back to work and never did recoup or trade again without the finances. She lost it all only because of greed and breaking the rules of trading. And one of the rules she broke besides the stop was the amount of money she was trading at a ratio of 500/1. With that kind of ration she was trading some major dollars. So, let Debbie’s story be a lesson in what not to do.

Trading the DB/SAR is for both trend and consolidation. In consolidation is when you follow the DB from high to low and low to high. In trend is from high to low with the SAR breaking off for entries back into the trend and vice-versa.

The SAR is generally the first of the two showing from the top or bottom of the Fibo from the 0%. And this is where it gets complicated accordingly with the Parabolic and the reason is because of old school thinking.

SAR stands for “Stop And Reverse”. With that meaning in mind you then can associate the SAR with the PSAR “Parabolic Stop and Reverse”. This means; the SAR will attached in stone with a candle retracing to the parabolic support or resistance according with trend of the Parabolic’s. The retrace must be heavy enough to get close enough; or even touch the Parabolic before the SAR will attach to the candle. And this could happen BEFORE the 2 hour turn for a new swing; such as showing on Friday’s closing. And because of the consolidation the SAR will retrace back towards the DB; but not necessarily at the “0” Fibo because at the 0% Both DB/SAR must connect together. So, the SAR could attach without the DB at the Parabolic and continue with the down leaving the DB at the “0” line. And we will know more of which connection will happen with Sunday’s opening as we still have ROMAR as resistance.


Looking at this picture above you will notice a Red arrow pointing down and the Green arrow pointing up. These arrows are your alert for the market crossing EMA. These Arrows will blink on and off until the opening of the next candle. If the Alert goes off on the next candle then the Arrow is set in stone. If the alert does not go off on the next candle means the Arrow was not set in stone and is no longer showing on the chart. So, be careful when in consolidation with these alerts. In trend; then take the alert and stay with it.

We are going back to the 1st of February for the trade I took back then. As you notice the new Fibo at 132.276; this was on Friday of January 29th and the SAR attached prior to closing for the week at 130.798. I knew I was going to be busy during the following week so long term was my only option during the first week of Feb. So there was nothing I can do until the following Sunday and wait on the next SAR attachment.

The next attachment was at 132.014 and I took the trade for the short on the next open candle. There were roughly 200 pips from the Top of the Fibo to the Bottom of the Fibo. I set my stop at 40 and my TP for 100.

And you are asking why would I take this trade with ROMAR Trend up and with the 4 horsemen up also? The answer is this:

1 – The Divergence attached with the previous candle.
2 – I have total faith in the system and do not doubt it one iota.


And this is where the fun came in:

You see my first entry at 132.014; the second entry was with the retrace to the Parabolic and entered again for the short at 131.909 with a SL 40 and this time the TP at 120 which gave me 200+ for the week and I was done for the week. And the bottom where you see the DB/SAR attached was the new 0% of the Fibo just over 200 pips from top to bottom. I could have taken more to ROMAR but I never let greed control my emotions.

The second entry was with the same amount as my first entry and that is because I always protect my margin to be sure I am never margin out with another trade such as this one.


Last week I had shown a trade I took with the SAR (below) in which the trend was down with a retrace from the DB/SAR at 123.057 and hooked on at the 123.770. And with this trade the TP was with the DB/SAR reconnecting at the “0” Fibo; as I had said before – this happens when a trend is about to end. It also happens with a beginning of a trend.


Now – let’s get into another scenario in using the DB/SAR during trading AND creating trading plans:

When the DB is separated from the SAR during the downtrend; it is telling you something. And that is: the next connection with the DB will be at the bottom of a candle somewhere in the downtrend; and vice-versa on the uptrend.

If the DB and SAR are connected together on the bottom of a Bar candle and the trend is up – then the next connection with the DB is somewhere on top of a candle in the uptrend; and vice-versa on the downtrend. Having this information on your trading plan gives you viable information for entries.

So, if the DB is connected on top of a candle for the downtrend the next connection is with the bottom of a candle. If the DB is connected with the bottom of a candle for the uptrend then the next connection is with the top of a candle. 80% of these connections are with the 0% of the Fibo.

As you notice on Friday’s closing the DB is connected at the 0% and must reconnect to the bottom of a candle somewhere in the downtrend. And if it bumps higher it still has to connect with a bottom candle in downtrend.

Just remember trading this technique takes much patience and focus for the right opportunities. Spend the week-end and study the DB/SAR and we will get more into it next week.

Thank you Master for share the story of ur Student. Thank you. More later in my house im going to study this post.

Very well done explaining this concept Sir, with the recent same charts we have been trading, so that they are meaningful examples for us to understand. I am so looking forward to going back in history over the charts this weekend, for more examples of what you have shared, to try and gain more knowledge and wisdom.

What you are taking the time and energy to share with us is truly amazing to me. I can not even imagine how long it must have taken you to fully develop and test this concept of being able to visualize (with confidence) not only what the market is doing, but also what it will do. A traders dream come true for REAL.
Then to not only offer to share it with people you do not even know, but also to take the time to disciple us as a father would for his child on properly understanding and applying it, is unbelievable. What a great example of someone who has been given a gift by God, and in turn is multiplying that gift to countless others.

You are definitely a gifted teacher, and I appreciate your life lessons on fear and greed very much as well, and personally will heed all your advice as I truly believe it does not come only from you. I pray your life will be enriched by much, much more than mere wealth, and please know that your example and selflessness will be changing many lives forever.

Luke 12:15 Then Jesus said to them, "Watch out and guard yourself from all types of greed, because one's life does not consist in the abundance of his possessions."

Andy.

Thank you Dove. A few questions:

a) "fibo highs and lows" are the "reference for the entries" - I don't quite understand this statement. Do we (a) want to enter at the 0-fib, or (b) once we see the fibo flip (and the 0 at the high using the current market situation for example purposes), start looking for conditions that would indicate an entry?

b) The DB will continue attaching to new bar highs as the market moves up. At what point does it stop attaching to new bars? Does the market crossing the EMA have something to do with indicating that the DB will no longer move in the previous connection and now seek to connect in the opposite direction? [You mentioned the EMA arrows in this post so I thought perhaps they had something to do with it...]. The yellow dashed line along the bottoms, and the green dashed line across the tops, I believe, shows prior DB connection points. So for example, on Thursday, DB looks to have initially connected at 124.216. The market retraced down, but then pushed back up and made a new high to which DB is now currently attached. Perhaps this is a bad example because the fibo had not flipped at that point. However, not that it has, how do we know that the DB will remain at the top and fibo 0 will not move up higher? Or maybe we do not know that...

c) With the current situation as Friday ended, you say because of the consolidation, SAR will retrace back toward the 0 line - how do you know, or do you yet know, that SAR will not exceed the 0 line where DB is?

d) To further upon question C, in your previous example from several weeks ago, we were in a similar situation with the DB and SAR. However, trend was different and I believe I remember correctly that H1 and H2 were both setup for long trends (with EMA > ROMAR). So in that example, how did you know that the retrace back to the 0 line would not exceed the 0 line and cause DB to then move again higher?

e) Your last picture of the bottom prior to the past two days' swing up shows that there was a 0 fib and a DB connection at 123.052. SAR retraced up and made a high, then went back down and exceeded the 0 fib, and the DB moved to the new low at 123.033 [this then ultimately ended at the most recent low and 100 fib at 122.433]. So what made this situation different than the high mentioned in question d (granted it is opposite in direction)? The SAR left DB, had retraced up, then pushed back down toward DB. Why, if someone had looked for a short in the setup mentioned in question D, would they not look for a long once SAR reattached at the bottom?

f) What determines whether the EMA arrow will be there after the close of the bar? I can't seem to find a pattern as to why the EMA arrow shows in some locations, but other locations, where the market clearly passed the EMA, the arrow does not show.

g) Can some point me to where the Divergence is discussed in more detail in the thread? I don't recall every discussing it in more detail, but it seems rather important in terms of why the countertrend trade was taken in the second picture.

Thank you for your help and if the answers to these questions are contained in the thread, please tell me so and I will go find them.

My interpretation of Dove's description produces a guess as shown in this picture. If the SAR and DB go from top to bottom of candles then this shape will happen. Any comments anyone.

Edit. I have decided to remove my guess image as I think on reflection it will confuse rather than help. Sorry.

Just printed and now I'm doing a full immersion. Thank you Master!

Yes i think the same thing.... Or can make a new Higher High, and again atach the DB with SAR.

I think the SAR is set in stone after candle close. Only the DB can move.

I saw some discussion on divergence near the bottom of pg 79. Still looking but maybe around that area. This I know, the green and gold dash-dot lines are what we're looking at, just not sure what to look for in the moment. I'm familiar with CCI and Stochastic divergence but understand that this is different.

As far as I understood, the SAR attached to the bottom of a candle means that the trend in the swing is down. And when the trend is down the SAR have to be traded from the top. Given that, two scenarios would come next week in my opinion:
1) The market will go down confirming the trend down and forming new lower lows. This makes the DB and the SAR be coincident and the SAR will disappear.
2) The market will retrace up towards the zero point of the FIBO without reaching it and then retrace back again for the down at the PSAR that is Resistance. This makes the SAR attaching to the top of the candle before the reverse. The opening of the next candle could be a possible short entry for the long term trading.